Departure tax unlikely to spur domestic travel in Malaysia

The Malaysian government is deliberating the imposition of a departure levy on all outbound air passengers starting June 1, 2019 to encourage travellers to take domestic holidays, but members of the travel industry are doubtful that the move will lead to the desired outcome.

When tabling Budget 2019 recently, finance minister Lim Guan Eng introduced the tax and its rationale of encouraging domestic tourism. The proposed levy is two-tiered, RM20 (US$4.80) for ASEAN-bound travellers and RM40 for other countries.

Malaysian Association of Tour and Travel Agents president, KL Tan, believed the departure tax will not have a significant impact on growing tourism and it would not deter travellers who have already made up their minds to travel overseas.

He also pointed out that not all travel abroad is for “leisure” purposes, but also include travel for education purposes, business travel, visiting relatives and friends living abroad as well as for religious purposes such as pilgrimage.

This view is also shared by others in the trade. Stephen Thomas, managing director at Topaz Travel & Tours, said: “Our clients are mainly middle and upper middle class. If they can spend on a holiday to Europe or any other longhaul destination, paying an additional RM40 will not have an impact on their travel decision.”

Manfred Kurz, managing director at Diethelm Travel Malaysia, opined: “Outbound travel may slow down a little in the beginning but people will get used to the departure levy because they cannot get around it.”

To stimulate domestic travel, product owners should create awareness of their attractions through enticing promotional materials, suggested Raaj Navaratnaa, general manager, New Asia Holiday Tours & Travel.

He added: “Relevant government agencies should also study the trends of what Malaysians are looking for and the travelling needs of the younger generation and tailor products accordingly. There is not much information on agro-tourism and the historical site of Bujang Valley lacks exposure.”

-TTG Asia.